Noncurrent asset

Definition

A noncurrent asset is a long-term investment that is not expected to be converted into cash within one year. Examples include property, plant, equipment, and intangible assets like patents.

5 Must Know Facts For Your Next Test

1. Noncurrent assets are listed on the balance sheet under long-term investments.
2. Depreciation expense typically applies to tangible noncurrent assets like machinery.
3. Intangible noncurrent assets, such as goodwill, may be subject to amortization.
4. Noncurrent assets are crucial for a company's operations and future growth potential.
5. The valuation of noncurrent assets can impact a company’s financial ratios and overall financial health.

Related terms

Current Asset: An asset expected to be converted into cash or used up within one year.

Depreciation:

The process of allocating the cost of a tangible asset over its useful life.

Amortization:

The gradual reduction of an intangible asset's book value over time.